Turnbull wants strong ACCC oversight of NBN Co

news Shadow Communications Minister Malcolm Turnbull has warned the National Broadband Network Company must not not dodge Australian Competition and Consumer Commission (ACCC) oversight, echoing concerns by a number of the company’s ISP customers early this year.

In light of its status as a statutory wholesale monopoly, with which all telcos in the retail market would be compelled to deal with, it is critical that appropriate rules for those dealings be made, Turnbull said in a statement on his site yesterday.

“Given its market power and monopoly status, the onus should be on NBN Co to be transparent, fair and consistent in its dealings with carriers,” Turnbull said. “Before obtaining ACCC approval for its Special Access Undertaking (SAU), NBN Co must be required to finalise its Wholesale Broadband Agreement (WBA) and make all terms, conditions and other commercial arrangements available for scrutiny by the public, the industry and the regulators” said Turnbull. The SAU outlines NBN Co’s pricing strategy and regulatory framework until 2040, while the WBA is the contract document guiding much of the relationship between NBN Co and ISP retailers.

“How can the ACCC be asked to give the green light to the SAU until all of these details are settled and transparent?” Turnbull asked.

“What does the NBN Co know about the eventual cost of its network (and the prices needed to meet its target return on capital) that everyone else doesn’t?” he continued. “We know the rollout targets contained in the NBN Co 2011–2013 Corporate Plan released in December 2010 have already been missed, and the financial projections were obsolete the day they were released.”

“It is imperative that Parliament and Australian taxpayers urgently be provided with updated financial and operational projections that accurately portray NBN Co’s current business plan, and the current expectations of NBN Co’s executives, directors and shareholders.”

Turnbull made his opinion clear in the wake of concerns expressed by telcos about what some see as the insufficient powers the ACCC can wield over the NBN under NBN Co’s SAU.

ISPs cannot acquire services from NBN Co without having signed its WBA. Telstra and Vodafone Hutchison Australia (VHA) had both expressed concern about the lack of regulation over the matter. In its submission to the ACCC Telstra termed this as unreasonable. VHA wants NBN Co to remain accountable to the ACCC and bemoaned the lack of regulatory oversight in a number of areas in the undertaking. The company said its “principal concern with the SAU is that it does not provide for sufficient ACCC involvement and oversight in the negotiation and ongoing application of the WBA.”

Earlier, Telstra had also questioned key aspects of NBN Co’s financial modelling as well as its pricing strategy. The telco giant was sceptical of NBN Co’s commitment to limiting price rises for wholesale customers, which it said could raise broadband prices for consumers.

6 COMMENTS

Earlier, Telstra had also questioned key aspects of NBN Co’s financial modelling as well as its pricing strategy. The telco giant was sceptical of NBN Co’s commitment to limiting price rises for wholesale customers, which it said could raise broadband prices for consumers.

I find this a null comment, the SAU needs to be ACCC approved, if the ACCC gives the green light on the SAU and they didn’t clearly understand all of the issues associated with the SAU, including, if they feel it is necessary, having the WBA finalised, it is the ACCC’s incompetence, and not NBNCo’s fault, nor concern. Don’t blame NBNCo if the ACCC are unable to do their job.

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